The CEO of Liberbank, S.A. (BME:LBK) is Manuel Menéndez Menéndez. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Manuel Menéndez Menéndez’s Compensation Compare With Similar Sized Companies?
According to our data, Liberbank, S.A. has a market capitalization of €976m, and paid its CEO total annual compensation worth €441k over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at €373k. When we examined a selection of companies with market caps ranging from €370m to €1.5b, we found the median CEO total compensation was €834k.
Most shareholders would consider it a positive that Manuel Menéndez Menéndez takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Liberbank has changed from year to year.
Is Liberbank, S.A. Growing?
On average over the last three years, Liberbank, S.A. has shrunk earnings per share by 22% each year (measured with a line of best fit). Its revenue is up 5.6% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Liberbank, S.A. Been A Good Investment?
Given the total loss of 46% over three years, many shareholders in Liberbank, S.A. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
It appears that Liberbank, S.A. remunerates its CEO below most similar sized companies.
Manuel Menéndez Menéndez is paid less than CEOs of similar size companies, but the company isn’t growing and total shareholder returns have been disappointing. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. Whatever your view on compensation, you might want to check if insiders are buying or selling Liberbank shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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